TROUBLED electric van maker Tanfield Group is attempting to raise cash after the value of its shares plunged by almost half, hitting a seven-year low.

The dramatic drop followed an announcement by the Wearside-based firm that it planned to sell shares at a substantial discount in order to tackle a funding shortage while it completes a restructure of its electric vehicle businesses.

It hopes that the attempt to raise funds, which The Northern Echo understands will take place within a matter of days, will help to reassure investors.

The share price of the electric vehicle and platform business ended 39.65 per cent down last night, at 17.50p, after earlier plummeting by 49 per cent.

Tanfield revealed to the Stock Exchange last week that its net cash had fallen to £2.2m at the end of June, down from £5.4m in December, last year. Darren Kell, the company’s chief executive was not available for comment last night, but following last week’s interim results he had been keen to stress that the company was in a relatively healthy position, despite making a loss for the last year.

At the time he said: “We have a deal that is progressing very well.

“The business is not at any risk.

“The core message which we need to get across is that we have a very strong balance sheet and no debt in the business at all.”

Tanfield expect to receive an injection of working capital following the decision to enter into an agreement to merge its Smith Electric Vehicles division with a US partner.

A Nasdaq flotation is being considered as part of the deal.

However, a statement released by the company outlining their funding position appears to have sparked the reduction in the share price.

It said: “There can be no assurance that the equity fundraising will proceed or that the discussions with (Smiths Electric Vehicles US), which remain subject to financing, will lead to a successful outcome.

“In the absence of such fundraising, or if the expected consolidation of the electric vehicle business failed to complete, the company would have to review its financial position and alternative sources of funding.”